Givaudan Sa · SIX:GIVN
Givaudan Sa — FY2003 Earnings Presentation
31 slides from Givaudan Sa's earnings presentation, Mar 2, 2004
Slide 1: Full Year Results 2003
Full Year Results 2003 2 March 2004 Industry Leadership Achieved 2 March 2004
Slide 2: Dr Jürg Witmer, Chief Executive Officer
Dr Jürg Witmer Chief Executive Officer 2 March 2004
Slide 3: Achievements 2003
Achievements 2003 ■ Actual sales growth of 9% in local currencies ■ Operating cash-flow increased by 17% ■ Industry leadership reaffirmed ■ Temporary margin decrease, addressed by margin improvement initiatives ■ Proposed total dividend of CHF 15.40 per share (previous year CHF 8.10 per share) 3 2 M
Slide 4: Sales by Division
Sales by Division Above market sales growth Actual Pro forma Growth vs. 2002 in local currencies +9% + 4% Growth vs. 2002 in CHF + 2% -3% In Mio CHF Actual Actual Pro forma 3,000 2,715 + 5% + 12 % + 4% 2,500 -1% +4% -4% 2,000 1,611 1,500 1,104 1,000 500 0 Group Fragrances Flavours 4 2 March 2004
Slide 5: Sales Evolution by Quarter
Sales Evolution by Quarter Pro Forma, in mio CHF Q1 2003 versus Q1 2002 Q2 2003 versus Q2 2002 in CHF in l.c. in CHF in l.c. Fragrances 283.7 -2.6% 6.9% 279.6 -4.0% 4.1% Flavours 401.7 -8.0% 4.8% 414.4 -11.9% -2.5% Givaudan Total 685.4 -5.8% 5.6% 694.0 -8.9% -0.1% Q3 2003 versus Q3 2002 Q4 2003 vers
Slide 6: Sales Evolution by Region
Sales Evolution by Region Pro forma, in mio CHF LATAM Total Sales Pro forma 9% EAME 2002 CHF 2’796 mio Asia Pacific 39% 2003 CHF 2’715 mio +4% in l.c. 19% Year 2003 255 Latin America 238 + 8% in l.c. USA / Canada 33% 552 Asia Pacific 525 + 4% in l.c. 991 USA / Canada 889 + 2% in l.c. 998 EAME 1063 +
Slide 7: Results
Results Pro forma and before CHF 68 million restructuring charge ■ Gross profit margin decreased from 47.4% to 46.1% ■ Operating profit consequently decreased from CHF 432 to CHF 408 million ■ Operating profit margin from 15.5% to 15.0% ■ Net income maintained at CHF 273 million ■ Net profit margin
Slide 8: Temporary Margin Decline Addressed
Temporary Margin Decline Addressed ■ Gross profit margin affected by u Exchange rates u Product mix in Flavours u Still lower Savoury margins u Price pressure u Raw material costs ■ Manufacturing efficiency improved ■ Operating cost stable ■ Margin improvement initiatives launched 8 2 March 2004
Slide 9: Margin Improvement Initiatives
Margin Improvement Initiatives As announced on 22 January 2004 ■ Initiatives include u Activity based operational improvements u Cost optimisation programmes u Adaptation of organisational structure with reduction of 300 positions ■ Annualised savings of CHF 67 mio ■ Savings impact of CHF 47 mio in
Slide 10: Key Operating Figures in USD
Key Operating Figures in USD In Mio 2003 2002 Pro forma Change in % In CHF In USD In CHF In USD In CHF In USD Sales 2,715 2,019 2,796 1,798 -3% 12% Operating profit before restruct. 408 303 432 278 -6% 9% Operating Profit 340 253 432 278 -21% -9% 10 2 March 2004
Slide 11: Industry Leadership Reaffirmed
Industry Leadership Reaffirmed Top 10 of the industry Total Sales 2003 in mio US$ 1. Givaudan 2'019 2. IFF 1'902 3. Firmenich 1'500 * 4. Symrise 1'450 * 5. Quest 1'130 6. Takasago 860 * 7. Sensient 450 * 8. T. Hasegawa 400 * 9. Mane 300 * 10. Danisco 210 * 10'221 Market Size (estimated) 12'000 Marke
Slide 12: Flavour Division
Flavour Division Sales, Operating Profit and EBITDA (before restructuring) - 4 % in CHF In Mio CHF In % of Sales + 4% in l.c. 1750 1679 30% 1611 1500 25% 24.1% 24.0% 1250 20% 1000 15.5% 15.3% 15% 750 - 5% - 5% 10% 500 405 386 260 247 250 5% 0 0% 2002 pro forma 2003 2002 pro 2003 forma Sales Operatin
Slide 13: Flavour Division: Key accomplishments 2003
Flavour Division Key accomplishments 2003 ■ Positive growth in all regions and all segments globally ■ Regained beverage momentum in North America ■ Renewed growth in Latin America with double-digit increase ■ Acquisition and successful integration of International Bioflavors ■ Completion of product
Slide 14: Fragrance Division
Fragrance Division Sales, Operating Profit and EBITDA (before restructuring) In Mio CHF In % of Sales - 1% in CHF + 5% in l.c. 30% 1250 1117 1104 25% 1000 19.3% 20% 18.4% 750 15.4% 15% 14.6% - 6% 500 - 6% 10% 250 172 215 161 203 5% 0 0% 2002 2003 2002 2003 Sales Operating Profit EBITDA 14 2 March 20
Slide 15: Fragrance Division: Key accomplishments 2003
Fragrance Division Key accomplishments 2003 ■ Significant above market growth in fragrance compounds u Double-digit growth in Fine Fragrances u High single-digit growth in Consumer Products globally ■ Accelerated focus on proprietary speciality ingredients u Production of sunscreen filters phased ou
Slide 16: High Rate of Innovation
High Rate of Innovation ■ Four new fragrance molecules added in 2003 to the perfumer’s palette: u Pharaone, a high diffuse top spice green note u Floridile, a fruity warm peachy character odorant u Belambre, a new transitional woody-ambery impact scent u Toscanol, a powerful and linear sweet-spicy n
Slide 17: Othmar Vock, Chief Financial Officer
Othmar Vock Chief Financial Officer 2 March 2004
Slide 18: Exchange Rates Development
Exchange Rates Development Average Exchange Rates Period-End Exchange Rates 2003 vs. 2002 31.12.2003 vs. 31.12.2002 8% 3% 0% 0% -1% -6% -6% -10% -14% JPY USD GBP EUR JPY USD GBP EUR 2003 1.16 1.34 2.20 1.52 1.16 1.24 2.21 1.56 2002 1.24 1.56 2.33 1.47 1.16 1.38 2.23 1.45 2001 1.39 1.69 2.43 1.51 1.2
Slide 19: Business Statement
Business Statement In Mio CHF 2003 2002 Pro forma Change in % of in % of in % sales sales Sales 2'715 100.0% 2'796 100.0% -3% Cost of sales (1'463) -53.9% (1'470) -52.6% 0% Gross Profit 1'252 46.1% 1'326 47.4% -6% Marketing, development & distribution expenses (643) -23.7% (664) -23.7% -3% Administr
Slide 20: Income Statement
Income Statement In Mio CHF 2003 2002 Pro forma Change in % of in % of in % sales sales Sales 2'715 100.0% 2'796 100.0% -3% Operating Profit 340 12.5% 432 15.5% -21% Financial income (expenses), net (40) -1.5% (53) -1.9% -25% Result before taxes 300 11.0% 379 13.6% -21% Income taxes (82) -3.0% (103)
Slide 21: Actual versus Pro Forma Comparison
Actual versus Pro Forma Comparison In Mio CHF Actual Pro forma 2003 2002 2002 Sales 2'715 2'674 2'796 Gross Profit 1'252 1'276 1'326 as % of sales 46.1% 47.7% 47.4% EBITDA (bef. restructuring) 589 605 620 as % of sales 21.7% 22.6% 22.2% Operating Profit (bef. restructuring) 408 431 432 as % of sales
Slide 22: Detail of Financial Income (Expenses)
Detail of Financial Income (Expenses) In Mio CHF 2003 2002 Pro forma Interest expense (47) (41) Exchange gains (losses), net 13 (41) Net gain (losses) on currency derivatives 4 59 Interest & dividend income 9 14 Amortisation of debt discount (5) (8) Net gains (losses) on marketable securities (4) (1
Slide 23: Non Operating Substance Variation
Non Operating Substance Variation In Mio CHF 2003 2002 Pro forma Total Financial income (expenses), net (40) (53) Variation in Marketable securities fair value 78 (103) (booked in equity) Net substance gain (loss) 38 (156) 23 2 March 2004
Slide 24: Operating Cash Flow after Investments and Taxes
Operating Cash Flow after Investments and Taxes In Mio CHF In Actual terms 2003 2002 EBITDA 521 579 Change in working capital (62) (30) Income taxes paid (67) (91) Other operating cash flows, net 89 (48) Operating Cash Flow after Taxes 481 410 Net additions to PPE and Intangibles (137) (79) Operatin
Slide 25: Financial Cash Flow
Financial Cash Flow In Mio CHF In Actual terms 2003 2002 Operating Cash Flow after Investments and Taxes 344 331 Net increase (decrease) in bank loans 88 234 Acquisition of minority interest in China (9) - Net cash effect of IBF Acquisition (31) - Net cash effect of FIS Acquisition - (200) Sale and
Slide 26: Balance Sheet
Balance Sheet CHF 4,561 mio CHF 4,548 mio ST 19% ST 14% ST 41% ST 43% 31 Dec 2002 LT 20% 31 Dec 2003 LT 29% LT 59% Equity 61% LT 57% Equity 57% Assets Liabilities Assets Liabilities In mio CHF Assets Liabilities and Equity Cash & Marketable 813 Short-Term 532 Year 2002 Securities 860 Debt 249 Year 2
Slide 27: Financial Summary
Financial Summary Achievements in demanding time for CHF substance conservation ■ Lower financial and tax expenses ■ Increased net profit before restructuring from 9.8% to 10.1% (CHF 273 mio) ■ Free cash flow after CAPEX, tax and financial expenses increasing to CHF 295 mio ■ Marketable securities u
Slide 28: Dr Jürg Witmer, Chief Executive Officer
Dr Jürg Witmer Chief Executive Officer 2 March 2004
Slide 29: Further Dividend Increase Proposed
Further Dividend Increase Proposed ■ Dividend increase to CHF 8.90 per share (previous year CHF 8.10 per share) ■ Special dividend of CHF 6.50 per share (out of reduction of marketable securities) ■ Total pay-out of CHF 15.40 per share proposed to the Annual General Meeting of 16 April 2004 29 2 Mar
Slide 30: Total Shareholder Return
Total Shareholder Return Permanent increase since spin-off ■ Best SMI-performer since spin-off: u Share price increased by 26% (from 8 June 2000 to 31 December 2003) ■ Dividends paid u 2001 CHF 6.50 per share total CHF 54 mio u 2002 CHF 7.00 per share total CHF 57 mio u 2003 CHF 8.10 per share total
Slide 31: Outlook 2004
Outlook 2004 ■ Secure industry leadership adhering to consistent strategies since spin-off ■ Further leverage unique expertise in smell and taste to drive profitable organic growth ■ Expand innovation platform ■ Strict cost discipline and successful implementation of margin improvement initiatives ■